Firm behaviour Flashcards
1
Q
Profit Maximization
A
Profit = Total Revenue - Total Costs
2
Q
Productivity formula
A
Productivity = Total Output ➗ units of a factor
3
Q
Cost Minimization
A
Product life cycle from launch through to growth,
maturity and decline.
Costs at minimum in maturity
Firms can look at making other costs savings
4
Q
Shareholder value
A
Shareholders rewards for taking a risk of investing in a business
S.V increased by value of the dividends paid to shareholders
